Students Hurt by Lack of Competition in Digital Education

Published February 2, 2015

Digital education is an $8 billion industry in the United States, dominated by three publishing companies: Houghton Mifflin Harcourt, McGraw Hill, and Pearson.

Neal McCluskey, associate director of the Cato Institute’s Center for Educational Freedom, said that dominance creates several problems.

“I think the biggest concern is that these online resources are Trojan horses for massive data collection on students, both by companies like Pearson and, even more concerning, governments that will eventually use the data to try to micromanage education and the economy,” said McCluskey. “Federal encouragement and state collaborations all raise red flags, even if right now their intent really is just to get good material to students as cheaply as possible.

“I am worried about Pearson especially, since it seems they are largely being handed a monopoly by states to run stuff like [the Partnership for Assessment of Readiness for College and Careers]. But this is more a problem of government than Pearson, per se,” said McCluskey.

In addition to creating digital and print educational resources, Pearson has been contracted to create Common Core tests for the PARCC consortium.

Concerns Over Quality, Bias

Bob Schaeffer, public education director of FairTest: The National Center for Fair and Open Testing, said there is real concern about the quality of the educational resources made by Pearson and other large companies.

“When you have a monopoly, the lack of competition can result in inferior products,” Schaeffer said. “Many people believe [Pearson has] expanded so rapidly that they’ve paid more attention to marketing and promotion than to quality control. The track record speaks for itself.”

“They have an awful track record,” said Schaeffer. “They’ve lost tests, mis-scored tests, they’ve had computerized testing failures, they’ve had nonsense questions on their tests. It’s an awful track record of repeat errors.”

Instead of allowing companies like Pearson to dominate the market for digital education while also creating tests that measure students’ understanding of the materials, a better option would be to use classroom performance assessments by teachers, double-checked by independent reviewers, Schaeffer said.

“To entrust a company with such a poor track record with this level of influence over education is dangerous,” he said.

“In the case of Pearson,” Schaefer added, “there is another issue of whether schools that have Pearson educational products will do better on Pearson tests. “There is a question as to whether schools who have the money to buy Pearson products will have a leg up.”

“There is an old adage: What you test is what you get,” said Schaeffer. “What that implies is the company that manufactures the test can have strong control over education, including the content and the products used.”

‘Industry Collusion’

Dean Florez, president and CEO of the 20 Million Minds Foundation, said there is no competition in the digital education sphere and the big three companies operate with “a little bit of a wink and a nod at each other.”

“Industry collusion—that is the term I would use,” said Florez. “No one is looking to be the low-priced competition. There is no Southwest Airlines for publishing.”

Florez and other education advocates say the stranglehold the big three publishing companies have over digital education may soon be broken by open education resources (OER), materials licensed in a way not tied to a specific author or entity. It means teachers don’t have to buy an entire textbook to use something from it.

“It’s kind of like Google on steroids,” said Florez.

OER materials can be offered at about an eighth of the price of other educational resources and are free to view online, Florez said. His organization is working to make OER materials available for all teachers, schools, and students.

“We believe the right place for OER is the nonprofit space,” he said. It’s more of a movement.”

“If we can get publishers to do something different, then that is our success,” he added.

Interest in OER

Florez noted OER would be beneficial for K–12 schools and colleges.

“I think the K–12 market is the easier market for OER, because you’re not going after every individual faculty member to make a choice,” he said.

A coalition of nine states is working toward using OER, Florez said.

“That’s going to be the real game-changer in 2015,” he said, adding he believes state coalitions will make the movement to OER a reality.

“Because of the Internet, we’ve hit this point where we have the opportunity to completely disrupt this market with open education resources,” said Florez. Teachers would be allowed to pull chapters and customize lessons without worrying about copyright infringement, he explained.

“I do think OER seems to be on an upward swing. The days are quite numbered for the publishers,” Florez said.

Heather Kays ([email protected]) is a research fellow with The Heartland Institute and is managing editor of School Reform News. 

Image by Wesley Fryer.